Energy Is Our Business

Energy is our business Annual Report 2008 Alpiq Holding Ltd. (formerly Atel Holding Ltd) Bahnhofquai 12 CH-4601 Olten Tel. +41 62 286 71 11 Fax +41 62 286 73 73 www.alpiq.com Atel Group Annual Report 2008 As a leading energy services provider operating throughout Europe, Atel generates, trades and sells electricity, and also provides a broad range of energy services cov- ering all aspects of energy and its applications. Subsidiaries and branches Energy segment Energy Services segment Power generation Electricity sales and trading (exchanges / OTC market) As a leading energy services provider operating throughout Europe, Atel generates, trades and sells electricity, and also provides a broad range of energy services cov- ering all aspects of energy and its applications. Subsidiaries and branches Energy segment Energy Services segment Power generation Electricity sales and trading (exchanges / OTC market) Mission Statement Atel is an energy company that is active throughout Europe with strong roots in Switzer- land. Energy has been Atel’s core business for more than 110 years. Its activities in the fi eld of power generation, trading, sales and energy services are supported by pan-European partner- ships built on mutual trust. Atel acts with social responsibility, ever-mindful of the needs of customers, shareholders, employees and the community alike. 2 Key Figures 2008 Atel Group + / – variance 2007 – 2008 in % 2007 2008 2007 2008 (based on CHF) CHF million CHF million EUR million EUR million Energy sales (TWh) – 25.2 128.841 96.328 128.841 96.328 Net revenue – 4.1 13 452 12 897 8 187 8 127 Energy – 6.9 11 505 10 712 7 002 6 750 Energy Services 14.4 1 959 2 242 1 192 1 413 Earnings before interest, tax, depreciation and amortisation (EBITDA) 2.2 1 253 1 281 763 807 Depreciation – 12.9 – 248 – 280 – 151 – 176 Earnings before interest and tax (EBIT) – 0.4 1 005 1 001 612 631 as % of net revenue 7.5 7.8 7.5 7.8 Group profit – 5.8 778 733 474 462 as % of net revenue 5.8 5.7 5.8 5.7 Net investments 77.7 591 1 050 360 662 Total equity 5.8 3 621 3 830 2 188 2 579 as % of total assets 38.6 36.2 38.6 36.2 Total assets 12.6 9 381 10 566 5 668 7 115 Employees* 10.1 9 034 9 944 9 034 9 944 plus trading in standardised products in TWh – 35.9 220.115 141.191 220.115 141.191 in CHF million or EUR million – 26.8 15 885 11 627 9 668 7 326 * Average number of full-time equivalent employees Per share information + / – variance 2007 2008 2007 – 2008 in % CHF CHF Nominal value 20 10 Share price at 31.12. – 11.6 605 535 High 26.4 605 765 Low 1.3 371 376 Net profit – 10.5 38 34 Dividend* – 10 Reduction of nominal value 10 – * Proposal to the Annual General Meeting of 23 April 2009 3 Contents 10 Foreword 12 Interview with the CEO 22 Milestones 34 Energy Segment 58 Energy Services Segment 72 Corporate Social Responsibility 76 Corporate Governance 90 Addresses and Financial Calendar 92 Acknowledgements Financial Report (separate section) 4 Weinfelden, Switzerland Having undergone canalisation followed by natural more than 200 beavers, whose industrious building of regeneration, the River Thur is once more accessible to canals and dams clears groves, letting in more sunlight the public and to the local fauna, and offers adequate and in so doing helping to promote biodiversity. This is protection against fl ooding. A broad course, well- also Atel’s aim. Through Atel EcoPower, the company wooded banks – some steep, some fl at – and a variety has a stake in Wasserkraftwerke Weinfelden AG, which of changing currents and natural gravel beds combine operates the three small hydroelectric power stations of to create a landscape that is rich in diversity, where not Widen, Model and Mühle on the Thur Canal, harnessing only the number of wading birds has increased, but the waters of what was once a wild stream to generate also the former riparian forests are enjoying a new around 10 GWh of electricity per year: enough to meet lease of life. And even the beaver, which only two cen- the power requirements of 3,000 households. Three turies ago was extinct in Switzerland, feels at home more small hydroelectric stations that Atel plans to in Thurgau once again. The area surrounding the Thur build on the Thur will supply another 1,000 households Canal and its tributaries now provides a habitat for with electricity. The Thur Canal next to Widen power station provides a rest and recreation area for humans and a habitat for animals. While the natural riverbank lets aquatic animals move easily to dry land ahead of the power station, a fauna passage allows land animals to safely cross the canal. Wherever the beaver is at work, fl ora and fauna fl ourish. This shy rodent helps to keep the ecosystem intact in riparian landscapes, but feels at home only if the rivers and streams it inhabits have suffi cient water at all times. For this reason, a residual water pipe was also installed next to Widen power station. During maintenance work on the tributaries of the Thur, all fi sh are caught and released back into the river. Water offi cer Hanspeter Zwahlen (right), who is responsible for maintenance at the three power stations, helps cantonal fi sheries offi cer Markus Grünenfelder with the “electrical catch”. The Thur weir has potential for expansion: at present, two cubic metres of residual water fl ow through here every second. A weir power station could use this to generate around three GWh of electricity per year. 10 Dear Shareholder, were caught up in this trend as the price of crude oil plummeted from an all-time high of more than 140 dollars in July to less than 50 dollars (down to the 2004 level) at the year end. While Atel’s results for the year are slightly below ex pect ation as a consequence of this changed situation, they nevertheless remain close to the high level record- ed in the previous year. So, all things considered, the results are highly satisfactory and we are duly proud of them. The prospect of sustained long-term growth, albeit at a slower pace, remains intact. On behalf of the Board of Directors, I would like to thank the Executive Board under CEO Giovanni Leonardi and the 10,000-plus employees at Atel for their daily dedication and valu- able contribution to our company and all the values it embodies. In my letter to you in last year’s Annual Report, I wrote: For years, Atel’s business performance has been on the “Climate, shortages and competition were the core rise, driven by growth in revenue, profi t and sharehold- issues dominating the year under review. These three er value, as well as satisfi ed customers, shareholders and issues also dictate the boundary conditions for Atel’s employees. This gratifying trend is the result of a care- development over the next few years.” Does this still fully crafted business policy and forward-looking corpor- hold true against the changed backdrop of an emerging ate decisions. But a particularly favourable operating slowdown in economic growth? I believe it does. environment, marked by rising affl uence, increasing de- mand for energy and booming markets, has also played Climate: climate is subject to longer cycles than the its part. Unfortunately, however, this paradise was short- economy. Hence the long-term trend towards rising lived, and in 2008 fi nancial and economic conditions greenhouse gas emissions remains unaffected by short- took a marked turn for the worse, as massive profi ts term fi nancial and economic cycles. Fossil-fuel-based turned into severe losses overnight and banks turned to generation of electricity accounts for a not insignifi cant the state for bailouts. Around the world, rescue pack- share of CO2 emissions, and there is still a need for ac- ages costing thousands of billions of francs were put to- tion in this area. But now, climate policy – which a year gether. Inevitably, energy and raw materials markets ago was still the main engine driving global politics – is 11 Interview Segments Foreword Milestones Responsibility Addresses and Corporate Social Social Corporate Financial Calendar Corporate Governance Corporate increasingly having to jostle for position with fi nancial Competition: liberalisation has paved the way for a com- and economic policy priorities. As a result, ambitious petitive electricity market throughout Europe. But climate objectives risk lagging even further behind the hopes that this would result in cheap electricity prices actual trend in greenhouse gas emissions. This is bad have not been fulfi lled. On the contrary, the new regu- news not only for the climate, but also for the credibil- lations have driven electricity prices up, also prompting ity of policymakers, who must strive to do more than political intervention here in Switzerland. But now, merely salve a bad conscience. Hence the electricity there are hopeful indications that legislative volatility industry’s responsibility and commitment towards peo- can be constrained, and that politicians and business ple and the climate is more important than ever. Mind- leaders will join forces to keep electricity prices down ful of this, Atel stepped up its investments in renewable without compromising the fundamental principles of a energies again during the year and founded Atel Eco free electricity market. Atel is interested in constructive, Services AG, reinforcing its resolve to build an even viable solutions.

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